Blow to motorists as car tax to rise from April – check how much more you’ll pay

CAR tax will rise from next month in a blow for millions of motorists.

The announcement came in the Spring Budget 2023 today and following a speech in the House of Commons by Chancellor Jeremy Hunt.

Vehicle Excise Duty will be uprated from April 1 by the rate of RPI for cars, vans and motorbikes – 10.1%.

In good news for the haulage sector, VED rates will be frozen for lorry drivers from the same date.

Vehicle Excise Duty is an annual tax you have to pay to have your car on the road.

You have to pay the tax when the vehicle is first registered.

You then have to pay the tax from then on to maintain having your vehicle on the road.

The exact amount your VED will go up from April 1 depends on the type of vehicle you own, as you pay different amounts based on its weight.

Your rate is different based on when you registered your vehicle too.

If you want to check how much more you will pay from April 1, you can work out the maths yourself.

You just have to go on the Government’s page on Vehicle tax rates and then scroll down to the option that best matches your car, bike or van.

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Spring Budget at a glance

• Millions of households will save £160 after the Energy Price guarantee was extended
• Cigarette prices will rise after the government hiked tobacco tax
• Drivers won’t pay more for fuel as duty was frozen and a 5p cut will continue in a huge win for The Sun’s campaign to keep it low
• The lifetime allowance on pensions will be axed and the annual allowance will increase
• The government will give councils £500m to fix potholes
• Millions of energy customers on prepayment meters will no longer pay more
• Jeremy Hunt unveiled 12 low-tax investment zones across the country
• Alcohol duty on beer in pubs will be cut, saving 11p per pint – but tax on wine and spirits will increase
• The Chancellor confirmed that benefits will rise next month
• Corporation tax will rise to 25% next month
• The government will extend free childcare to 30 hours for one and two-year-olds
• Working parents on Universal Credit will get more for childcare and costs covered straight away

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Take the cost, divide it by 100, then multiply that by 10.1%. You then add that figure on to the original figure you would currently pay and you’ve got the new amount.

For example, if you had to pay £150 vehicle tax based on current rates, you will have to pay £165 from April 1.

If you had to pay £230 based on current rates, you will have to pay £253.23 from April 1.

If you’d pay £585 now this will go up to £644 from next month.

If you’re keen to know about the winners and losers from this year’s budget, read our full list here.

How can I save money buying vehicle tax?

There’s a few things you can do to save money when buying vehicle tax.

If your car is in band B or above, you can pay for the whole year up front, every six months or monthly.

But, it’s usually cheaper to pay for the whole year up front.

You’ll save yourself some money by buying a car that runs on alternative fuels such as ethanol.

If you’ve got an electric vehicle, you don’t have to pay tax until April 2025.

So if you’ve got the budget and are looking at buying a new car, you could invest in an electrical one.